Title

Author

Document Type

Degree Name

Doctor of Philosophy (PhD)

Degree Program

Economics

Year Degree Awarded

2014

First Advisor

Arindrajit Dube

Second Advisor

Michael Ash

Third Advisor

Jeannette Wicks-Lim

Subject Categories

Labor Economics

Abstract

This three-essay dissertation empirically examines the effects of minimum wages on teen and restaurant earnings and employment, and also on the receipt of public benefit programs. In the first chapter, co-authored with Arindrajit Dube, we extend the synthetic control approach to 32 state-level case studies of minimum wage increases. We do not find a statistically significant effect on teen employment, with the mean elasticity close to zero. There is also no indication of heterogeneous treatment effects. Finally, we discuss some important practical challenges, including the ability to find close matches and the choice of predictors used for constructing a synthetic control.

The second chapter focuses on the heterogeneity of minimum wage effects across low- and high-wage areas. In a border discontinuity study of county-level data on restaurants, I find that in counties where the minimum wage binds more, restaurant workers have statistically larger elasticities of earnings and also that there are suggestions of larger disemployment effects. Importantly, I find relatively constant labor demand elasticity estimates along a wide range of minimum-to-median wage ratios. In counties with minimum-to-median wage ratios of 0.32 and 0.52, the labor demand elasticity estimates range from a low of -0.242 to a high of -0.343. The narrow range of labor demand elasticity point estimates suggests that increased employment responses are due simply to increased coverage of the minimum, as opposed to nonlinear responses in labor demand.

In the third chapter, I estimate the effects of the minimum wage on participation in several major public benefits programs. I find uniform evidence across specifications that increases in the minimum wage strongly reduce participation in food stamps programs: in my preferred specification, the elasticity of food stamps receipt with respect to the minimum is -0.39, with a 95 percent confidence interval of (-0.57, -0.22). Effects on school lunch subsidy and Medicaid participation range from near zero to statistically significant elasticities of -0.11 and -0.16, respectively, depending on the exact specification. I also estimate minimum wage effects close to zero for Earned Income Tax Credit (EITC) participation.